Wholesale price inflation decreased to a 27-month low of (-) 1.21 percent in October, driven by significant deflation in food items such as pulses and vegetables, along with reduced prices of fuel and manufactured goods, as reported by government data on Friday. The Wholesale Price Index (WPI)-based inflation was at 0.13 percent in September and 2.75 percent in October of the previous year. The Industry Ministry stated that the negative inflation rate in October 2025 is mainly attributed to falling prices of food articles, crude oil and natural gas, electricity, mineral oils, and the production of basic metals.
WPI data indicated that deflation in food articles reached 8.31 percent in October, compared to 5.22 percent in September, with prices of onion, potato, vegetables, and pulses decreasing. Deflation in vegetables was 34.97 percent in October, up from 24.41 percent in September. For pulses, deflation was recorded at 16.50 percent in October, while potato and onion prices fell by 39.88 percent and 65.43 percent, respectively. In the manufacturing sector, inflation dropped to 1.54 percent, down from 2.33 percent in September. Fuel and power experienced a negative inflation rate of 2.55 percent, compared to 2.58 percent in September, marking a decline for seven consecutive months.
Paras Jasrai, Associate Director at India Ratings and Research, noted that a favorable base effect for the remainder of FY26 is anticipated to maintain the wholesale index in deflation, predicting wholesale deflation in November 2025 to remain below 1 percent. The decline in WPI inflation aligns with expectations following the reduction of Goods and Services Tax (GST) rates effective September 22, where rates on essential mass consumption goods were lowered as part of a tax rationalization that simplified the four-tier tax structure to only two slabs of 5 and 18 percent.